Godrej focuses on soaps amid stiff competition

Godrej Consumer Products Ltd (GCPL), India’s second-largest soap maker, is looking to consolidate gains made in the first quarter of this financial year. The maker of brands like Cinthol, Fairglow and Godrej No. 1 saw its soaps business grow by 17 per cent in the June quarter vis-a-vis the corresponding period a year ago.

This is the highest growth in three quarters for GCPL in the segment. In the December quarter last year, Godrej’s soaps business grew by around six per cent, while in the March quarter, growth was around 13 per cent, says Tarun Arora, executive vice-president, marketing, GCPL.

The current level of growth, say industry experts, comes at a time when the overall soaps market, which stands at around Rs 9,000 core, is slowing down. From growth rates of 9-10 per cent over three quarters ago, it is now down to five-six per cent, they say.

Arora says a combination of efforts, including aggressive marketing and distribution, is what helped Godrej keep the momentum going in the last few quarters.

GCPL relaunched Godrej No.1 and Fairglow last year, following it up with the launch of variants such as Saffron & Milkcream under the No.1 umbrella. At the same time, it also attempted to push distribution in rural areas, where the response to the relaunched No.1 brand has been good, says Arora.

At the moment, Godrej No.1 reaches some two million outlets. The brand has seven variants, while Cinthol has four variants. The latter, says Arora, is more visible in urban areas, including modern trade, compared to No. 1, which is strong in rural areas. “Fairglow is positioned as a fairness soap and as such is visible in both urban and rural areas,” Arora says. There are no variants of Fairglow.

GCPL’s efforts to push growth in soaps also come at a time when competition in the category is heating up. Arch-rivals Reckitt Benckiser and Wipro Consumer Care & Lighting are waging a pitched battle for the No. 3 slot.

It was only recently that Reckitt overtook Wipro as the number 3 soap maker in India, behind Hindustan Unilever Ltd (HUL) and GCPL. HUL has a market share of about 45 per cent, followed by GCPL (10.1 per cent). Reckitt’s share is 9.1 per cent, while Wipro has a market share of 8.1 per cent.

Thanks to the lead that HUL has in soaps, its position remains secure, say experts. It is GCPL, on the other hand, which will have to monitor the moves of Reckitt and Wipro closely to ensure its second position is not threatened in any way, they say.

Reckitt, incidentally, was able to steal a march over Wipro on the back of ‘germ-fighter’ Dettol. Wipro, on the other hand, has no soap brands on the health platform. Both Santoor and Chandrika are beauty soaps.

GCPL, too, has no major presence in the health space under soaps.

There is one brand, Vigil, in the Godrej portfolio, which is small. Its Protekt brand, on the other hand, is an umbrella for its hand sanitizers, not soaps. Godrej’s existing brands drive freshness (Cinthol), beauty (Godrej No.1), fairness (Fairglow) and healthy hair (Shikakai).

Arora says the market for these segments remains strong. He declines to indicate whether the company will beef up its presence in the health space with a new launch.